U.K. house prices may rise further: survey

LONDON--In a continuation of recent increase in house prices, U.K. consumers expect the value of residential property to have risen in November and expect further gains over the next 12 months, a survey showed Friday.

Respondents across the country to the monthly survey by estate agency Knight Frank and data firm Markit were more optimistic about the value of the home they live in. Londoners continue to be the most optimistic--a reflection of the price boom reported there in recent months as foreign investment has helped to swell valuations of the few properties available for sale there.

The balance of consumers who expect the value of the home they own or rent to have gone up in November was 57.8, slightly lower than the record high 59.1 in October but still indicative that more people expect gains than declines.

A similar slip was reported for the price outlook 12 months ahead with the November balance down a touch at 70.1 from October's record high of 71.1.

The balance is calculated by subtracting the number of people expecting falls from those saying prices have risen or will rise.

"Confidence across the housing market has been lifted by brighter economic conditions and government interventions in the mortgage market," said Grianne Gilmore, head of U.K. residential research at Knight Frank.

The survey is in line with the recent months of rising house price indexes, which reflect an increase in home-buying activity but little change in the availability of homes for sale.

The government's Help-to-Buy program is also helping to boost property values as it has helped to increase the supply of mortgages to first-time buyers and those with smaller deposits but a secure and large enough income to afford monthly mortgage payments.

And, while those surveyed remain upbeat over property valuations, Knight Frank is also forecasting further property price gains. Thursday it said it expects U.K. house prices to rise 7% in 2014. By the end of 2018, the estate agency said it expects the cost of an average U.K. home to be 24% higher than at the end of 2013.

"We have been persuaded that growth in 2014 and 2015 will be substantially higher than inflation," said Liam Bailey, global head of residential research.

"However we have maintained our view that over the long term, while nominal and real price growth may remain positive, house prices are likely to rise more slowly than earnings for at least a few years after 2016," Mr. Bailey said.

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